Israeli soldiers advancing inside the Gaza Strip have been stunned by the huge
number of defensive tunnels they have found dug by militants, senior
intelligence sources said today.

The army has been slowly neutralising tunnels one by one to avoid a repeat of the heavy casualties it suffered in Lebanon in 2006 when outflanked by Hizbollah gunmen hiding underground.

Another Hizbollah tactic of luring Israeli soldiers into booby-trapped houses claimed three victims this week when an officer was critically wounded and two soldiers lightly injured by a charge detonated inside a building.

While various booby-trapped buildings had been discovered and disarmed since Israeli ground troops entered Gaza ten days ago, the incident late on Monday night was the first time one had exploded.

It reminded the Israeli planners of the extent to which Hamas and other Palestinian militants have borrowed directly from Hizbollah tactics of "aggressive defence''.

"The extent and the quality of the tunnels we have found inside Gaza is quite something,'' one source told The Telegraph at a military headquarters in Tel Aviv.

"There are so many of them that when the fighting is over they could build an underground (train).'' The discovery raises problems for the eventual reconstruction of the many buildings damaged in Gaza by Israel's operation Cast Lead as Israel will be concerned cement for houses will be diverted for tunnels.

In the past Israel has blocked the delivery of standard construction material such as piping and cement because of fears it could be put to a military use by militants.

While the Israeli press has carried various inflated claims for Hamas fatalities, the intelligence sources gave a more level-headed assessment of Israel's military achievements against Hamas and its infrastructure.

They said "a few hundred'' fighters from the armed wing of Hamas, the Izzedine Al-Qassam Brigades, had been killed in clashes with Israeli ground forces.

Before the fighting the brigades were estimated to number about 7,000.

And other Hamas security units including the police and internal security which were estimated to number 13,000 before the war, had suffered "another few hundred killed''.

"But the number killed really is not the problem,'' one source said.

"The problem is the operational capabilities of Hamas and here we have seen a reduction.'' He said he "believed'' senior Hamas commanders were hiding in hospitals although he could give no concrete evidence to support the theory.

Another source noted that at the start of the fighting militants were firing between 80 and 70 rockets a day from Gaza into Israel but the daily barrage has now declined to between 20 and 30.

He said there was no doubt the military assault had had a "heavy impact'' on Hamas but at this stage it was too early to say whether the group had lost the will to continue rocket fire into Israel.